Demand is expected to go up 29% this year, so it's not surprising that supply has a hard time keeping up. That's exactly why Elon Musk and SolarCity say that we will need many solar gigafactories.

The last time supply was tight, in 2006, the solar industry installed about 1.5 gigawatts that year. Contrast with today: The industry expects to install as much as 52 gigawatts this year and 61 gigawatts in 2015. That's about as much as is actually being produced by viable factories.

"For about as long as it has existed, the solar power industry has been going from boom to bust, and vice versa. It is growing fast, and has been for years, but forget about a smooth upward curve: Up close, the trajectory looks like the Alps."

Busts might be bad for individual companies, but they aren't necessarily bad for solar power itself, as we've seen in the past few years. A glut of panels meant that prices fell and a lot more solar power was installed than if prices had been high.

Now that demand has grown to match, and maybe now exceed, supply, the opposite will happen. Solar prices will go up, or at least not fall as fast, and more solar panel makers will make money. This will attract competition and new investments in additional capacity until supply once again overtakes demand and prices fall because of the glut...